Diet passage likely of postal privatization partial rollback

Legislation to partially roll back the postal system privatization is expected to sail through the current Diet session because the ruling Democratic Party of Japan will join the two major opposition parties that agreed Thursday to jointly submit a reform bill to this end, lawmakers said.

Earlier in the day, the Liberal Democratic Party and New Komeito agreed on a bill to overturn the postal privatization spearheaded in the early 2000s by then LDP Prime Minister Junichiro Koizumi that would have had the government sell off its stockholdings in Japan Post Bank and Japan Post Insurance Co. by 2017 to achieve full privatization of Japan Post Holdings Co.’s financial units, the lawmakers said.

Senior DPJ lawmakers, including Secretary General Azuma Koshiishi, said the ruling party will endorse the accord.

The bill agreed on by the LDP and New Komeito states that the sale of all shares in the postal banking and insurance units should be realized “as early as possible” by taking their financial conditions and roles in the postal business into account.

The wording means Japan Post Holdings will decide when shares in the two units should be sold, the lawmakers said.

The bill, which the LDP and New Komeito will jointly present to the Diet next week, also envisages merging Japan Post Network Co. and Japan Post Service Co. to reduce the number of companies under Japan Post Holdings to three from the current four.

As the postal privatization reform would lift a freeze on the government’s sale of postal shares in line with a 2009 law, New Komeito hopes to use proceeds from the sale to finance reconstruction work from the earthquake and tsunami disaster of last March.

But the bill is opposed by a considerable number of LDP lawmakers who want the current privatization plan, which would completely remove the two postal financial units from government control, to stand.